Critics of the tax
credit, rolled out under President Bush's leadership, will likely be
even more infuriated with pending proposals to bump the tax credit to as
high as $10,000 USD.

For all its fortune in the U.S., GM
is finding resistance to its push for government assistance in
China. China, looking to support local EV efforts, has thus far
rebuffed GM's urging to adopt a level tax credit for Chinese EV
buyers. GM, which reportedly sold
more cars in China last year than the U.S., is currently deciding
whether to scrap plans to build a series of EV charging stations in
China's urban areas.

GM China VP David Chen complains,"China
is the only country that has different subsidy policies [for electric
vehicles based on origin]. The U.S. government provides
US$7,500 for every electric car no matter where it comes from."

As
a result, the Chevy Volt is anticipated to be priced at over $40,000
USD after any applicable tax credits when it launches later this
year. This will be drastically more expensive the domestic
hybrids produced by Chinese rivals.

At the moment, any EV sold in the U.S.
(regardless of the country of origin) can get full tax credits.
In China, though, U.S. EVs receive unequal treatment.

Even
Japan, which long blocked auto imports from the U.S., recently
caved in and offered a whopping 3.24 million yen (roughly
$38,000 USD) tax rebate for those who buy Tesla
Roadster EVs. The Roadster, a luxury competitor to the
Volt, currently retails for 12.8 million yen (roughly $149,200 USD)
in Japan.

IHS Automotive analyst to Green
Car Advisor writes, "Although
the government is looking to increase the numbers of such vehicles
sold in the country, it is aiming to maintain the stranglehold of
locally built vehicles, and this is unlikely to change."

China's
EV dominance isn't merely limited to domestic assembly, though.
The growing giant also maintains a tight grip on around 95
percent of the world's rare earth metal production. EVs and
hybrid vehicles use much more rare earth metals then standard
vehicles. And it takes years to create active mines and
processing facilities for rare earth metals. Thus, to some
extent, China will be able to dictate the price of EVs and hybrids
internationally.

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